Takata Statement before U.S. House of Representatives Subcommittee on Commerce, Manufacturing, and Trade

AUBURN HILLS, Mich. & TOKYO

Takata Corporation, a leading global supplier of automotive safety systems, today announced that Takata Holdings Inc. (“Takata”), a subsidiary of Takata Corporation, today testified before the U.S. House of Representatives Committee on Energy and Commerce, Subcommittee on Commerce, Manufacturing, and Trade. The full oral statement of Kevin M. Kennedy, Executive Vice President of North America, Takata Holdings Inc., as prepared for delivery, is as follows:

Oral Statement of Kevin M. Kennedy

Chairman Burgess, Ranking Member Schakowsky, and distinguished Members of the Subcommittee, I’m honored to be here on behalf of Takata and our employees throughout the United States.

For Takata, safety is the core of who we are and what we do. We’re proud that Takata airbags have saved thousands of lives and prevented serious injuries in hundreds of thousands of accidents.

It is unacceptable to us for even one of our products to fail to perform as intended. We deeply regret each instance in which someone has been injured or killed.

We are committed to doing everything in our power to address the safety concerns raised by airbag ruptures. Our Chairman has made that commitment personally to Administrator Rosekind.

So let me tell you what we’re doing.

After months of testing and extensive analysis, we have agreed with NHTSA to take broad actions, in conjunction with the automakers, to respond to your concerns and those of the public.

We have recommended dramatically expanded recalls―including national recalls―that go well beyond what is suggested by the science and testing.

Most of the ruptures on the road, and all of the fatalities in the U.S., have involved older Takata driver airbag inflators―with “batwing-shaped” propellant wafers―that were already subject to previous recalls. And most of those have occurred in regions of the country with high heat and absolute humidity.

Nevertheless, we are now proposing expanded national recalls to replace all of these batwing driver inflators―from the start of production through the end of production―in any vehicle registered anywhere in the United States.

The recommended recalls will proceed in stages. The final stage will include the replacement of all batwing driver inflators previously installed as remedy parts.

Takata will cease producing the batwing driver inflators altogether.

There have been far fewer field ruptures involving passenger airbags. Nevertheless, our agreement with NHTSA also contemplates significantly expanded recalls for passenger airbag inflators, including a nationwide recall for one type of inflator.

The recalls for other passenger inflators will cover specific vehicle models ever registered in the high-absolute-humidity States, but with the potential for the recalls to expand to other States if ordered by NHTSA.

We will continue to test inflators beyond the scope of the recalls to determine whether further action is appropriate.

For both driver and passenger airbags, all analysis to date indicates that the potential for rupturing is limited to an extremely small fraction of older inflators.

That is not meant to minimize the issue―one rupture is too many.

It does explain, however, why Takata’s filings state that a safety-related defect “may arise” in “some” of the inflators. Not all of the inflators covered by the proposed recalls are “defective.”

Based on 50,000 tests to date and research involving leading experts from around the world, our best current judgment is that the potential for rupture is related to long-term exposure, over many years, to persistent conditions of high heat and high absolute humidity, as well as other potential factors, including possible manufacturing and vehicle-specific issues.

Nonetheless, we have proposed a broader remedy program.

NHTSA will play a central role in overseeing this remedy program.

Takata will prepare a plan for NHTSA outlining steps to help determine the safety and expected service life of the remedy inflators.

We will also work with NHTSA and our customers to get the word out to consumers to help maximize recall completion rates.

In addition to increasing our own testing, we are actively supporting the testing work of the automakers and NHTSA.

We also continue to support the work of the independent Quality Assurance Panel, led by former Secretary of Transportation Sam Skinner.

And we are continually ramping up our production of replacement kits. In December, we were producing approximately 350,000 kits per month. We are now producing more than 700,000, and by September, we expect our monthly production to reach 1 million kits.

Half of the replacement kits we shipped last month contained inflators made by other suppliers, and by the end of the year, we expect that to reach 70 percent.

We have confidence in the inflators we are making today and the integrity of our engineering and manufacturing. We believe that, properly made and installed, these inflators will work as designed to save lives.

We will continue to do everything we can to ensure uncompromised safety and the success of the recall efforts, and we will keep Congress, NHTSA, and the public updated on our progress.

Thank you, Mr. Chairman.

About Takata

Takata Corporation is a leading global innovator and supplier of automotive safety systems; including airbag systems, seat belts, steering wheels, electronics, sensors, and child restraint systems, and supplies all major automotive manufacturers in the world. Headquartered in Tokyo, Japan, it operates 56 plants in 20 countries with more than 36,000 global employees worldwide.

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